Uncovered Fund Inc., a Tokyo-based, venture capital fund targeting early and seed stage startups in Africa has launched with a targeted size of US$15 million and confirmed its first five investments in African tech startups.
Uncovered Fund joins other Asia-based VC firms like Future Hub, Kepple Africa and recently launched Sherpa Ventures, which have launched within the past four years and funded over 50 African startups during that period.
Going back to 1993, the Tokyo International Conference on African Development (TICAD) was formed to foster economic relations between Africa and Japan. The outputs of this forum have come in the form of grant aids and technical assistance. But in recent years, there has been another economic vehicle looking to drive development in Africa - Japanese venture capital firms funding tech startups.
The newly formed Uncovered Fund looks to invest in innovative early-stage companies in emerging (or “uncovered”) markets, mainly in Africa. The Japanese VC firm, founded by Takuma Terakubo, has just launched a US$15 million fund, which is scheduled to close at the end of June 2021. The fund will allocate US$50,000 to US$500,000 to innovative African tech startups in Seed and Series A stages.
Takuma Terakubo is no stranger to venture capital and the African tech space. Before the Uncovered Fund, Terakubo was the CEO of Leapfrog Ventures. Together with Japanese startup incubator, Samurai Incubate, they launched Samurai Incubate Fund - a fund focused on early-stage African startups. During his time there, the firm raised more than US$4.5 million targeted at startups in Kenya, Uganda, Rwanda, South Africa, Ghana and Nigeria. It also financed over 10 startups with checks similar to that of Uncovered Fund (US$50,000 to US$500,000).
Speaking of his investment philosophy, Terakubo says, “We [at Uncovered Fun] do not make scattered, one-shot, small investments, but rather we provide long-term growth support, including follow-on investment. In addition, we not only invest, but we also multiply the huge assets of Japanese companies to grow the business and provide technical support and finance as well.”
Further to this, the high potential for scalability, in African and Asian markets, is a critical box to tick for a startup to receive funding and support from Uncovered Fund. He says, “We are looking for African startups to expand their business across multiple countries. So, we welcome startups from any country as long as the business can scale.”
So far, it has backed five startups operating in five sectors and multiple markets. They include Kenyan e-commerce platform, Sky Garden; US-based and Africa-focused healthtech startup RxAll; Francophone Africa mobility startup, Gozem; Kenyan fintech company LipaLater; and YC-backed Nigerian digital freight startup, SEND Technologies. Terakubo says the firm invests in these sectors because “they are basic behaviors in people’s lives, and we believe it is important to improve convenience as quickly as possible.” The VC firm hopes to invest in 15 startups this year.
“We are looking into joint development from Africa to Asian markets, and that is the big vision we have for the future,” he said. “As a VC and also an entrepreneur, I’m looking forward to the challenge of working with African entrepreneurs to create that future.”